Form 1042-S

Form 1042-S: Foreign Person’s U.S. Source Income Subject to Withholding

Withholding agents are required to report income described under “Amounts Subject to Reporting on Form 1042-S” on Form 1042-S, and should not use other forms (such as W-2, 1099, 8288-A, 8805, and 8966). Who must file, where and when to file, and how to file are all detailed in this article.

What is Form 1042-S?

Form 1042-S is an information return used to report certain kinds of income to the IRS, and to report amounts withheld under chapters 3 or 4 of the U.S. Tax Code. Commonly reported income includes amounts paid to foreign persons that are subject to withholding per section 5000C, payments of eligible deferred compensation items to covered expatriates that are subject to withholding per section 877A, distributions from publicly traded trusts and qualified investment entities, distributions of effectively connected income, and payments subject to section 1446 withholding tax. Every person required to deduct and withhold any tax under chapters 3 or 4 is liable for such tax, but certain payments are not reported on Form 1042-S and should instead be reported on other forms such as W-2, 1099, 8288-A or 8805. Every withholding agent must file a Form 1042-S by March 15th of the following year and must also furnish it to the recipient of the income.

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IRS Form 1042-S – Who Needs to Fill It Out?

Every person required to deduct and withhold any tax under chapter 3 or chapter 4 of the IRS Code is liable for the tax and required to fill out the IRS Form 1042-S. This includes financial institutions, which must use the electronic version, as well as other entities such as withholding agents (defined in the Form’s instructions) who need to file the form if withholding occurred, even if the income was exempt from tax under a U.S. tax treaty. Exceptions can apply for those making payments not related to a trade or business activity or to certain individuals who qualify for the portfolio interest exception from withholding.

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Step-by-Step: Form 1042-S Instructions For Filling Out the Document

The Form 1042-S is used to report income described in Amounts Subject to Reporting on Form 1042-S, withholdings for chapters 3 and 4, specified federal procurement payments, eligible deferred compensation items or distributions from nongrantor trusts, and distributions of effectively connected income made by PTPs or nominees. Who must file? Every withholding agent must file with the IRS by March 15, 2024 and provide a copy to the recipient of the income. Form 1042-S is not to be used to report items that are required to be reported on other forms (W-2, 1099, 8288-A etc.), however withholding agents are still required to report payments that have been subject to withholding even if they were later released. Unless the income is exempt from tax under an applicable tax treaty or code, you must file a Form 1042-S. Paper Forms 1042-S must be sent to the IRS with Form 1042-T, while the IRS encourages electronic filing for all other filers of Form 1042-S unless the number of forms they are filing exceeds a certain threshold.

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Below, we present a table that will help you understand how to fill out Form 1042-S.

Form Name Information Required Details
Form 1042-S Information for Form 1042-S Used to report income, withholdings, and distributions, as well as specify filing requirements for withholding agents. Must be filed by March 15, 2024.

Do You Need to File Form 1042-S Each Year?

Every person required to deduct and withhold tax under chapter 3 or chapter 4 must file an information return on Form 1042-S to report amounts paid during the preceding calendar year. Exceptions include payments made to an individual that is a bona fide resident of a U.S. possession or territory, as explained in the instructions. Forms are due to the IRS by March 15th and must be furnished to the recipient of the income by the same date. Generally, financial institutions must file Forms 1042-S electronically, however, other individuals are encouraged to but are not required to do so unless the number of forms they are required to file exceeds a certain threshold.

Download the official IRS Form 1042-S PDF

On the official IRS website, you will find a link to download Form 1042-S. However, to make it easier for you, we are providing the link in our article, which comes directly from the official website! Click to download: Form 1042-S


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